Do you know who owns your credit card? It seems like an obvious question with an obvious answer, right? And still many people are confused, so I thought it would be good to review some basics.
Breaking It Down:
Who Owns Your Credit Card?
Here’s what recently happened to a dear friend when his wife passed away. He went to the mall to do some shopping. At the register his credit card was declined. Naturally, this was disturbing but even after a few tries the card was still being declined.
What he didn’t understand was how credit card accounts are structured and who owns credit cards. And especially during times such as the loss of a spouse, this lack of understanding can be super stressful.
How Credit Card Accounts Are Structured
Most credit-card accounts have a single owner. Others may appear on the account. These folks are called authorized users. An authorized user is NOT the owner of the account. In my friend’s case, his spouse owned the account and added him on as an authorized user.
The owner of the credit card bears all the liability for payment. The card owner is legally responsible for paying the bill, regardless of the authorized user’s spending.
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What Happens To A Credit Card In The Case Of Death?
But here’s what happens in the case of death. And it’s what my friend didn’t realize. Once the credit-card company learns of the owner’s death, it closes the account. This means that any authorized users lose access to using the card.
Maybe you’re wondering if a person can transfer ownership of the credit card.
The answer is no.
Transferring ownership of credit cards is not possible. This meant my friend, the surviving spouse, can not take the account as his own account.
You can also run into legal trouble if you don’t understand how credit card accounts work. You could run into fraud issues by continuing to use a deceased person’s credit card.
There are joint credit card options. For liability purposes, both owners would then be responsible for paying off all charges. In the situation of a joint account, both people need to apply at the same time. That way, both owners have their credit history evaluated and rated.
It is true though, in case you’re wondering, that many traditional card companies don’t allow for joint accounts.
American Express, Capital One, Chase, Citi, and Discover all refuse to offer joint accounts. Some credit card issuers do allow for authorized users. Bank of America offers joint-account cards and you may have better options for joint accounts with smaller, more regional banks.
Can You Do A Balance Transfer Between Cards?
A balance transfer moves debt from one card to another. The cards can be in different names, but both people must agree to it. And needless to say, both people must be alive.
If you aren’t sure if you have a joint account or are an authorized user, call the credit-card company and ask about the account. If you aren’t an owner, they may refuse to speak to you about account details. If they do speak to you, ask about liability. If it’s shared, you’re a joint owner.
Hope some of this basic credit card information was useful to you or to someone you know. It was a rude awakening for my friend so thought it worth a review.
Here’s a helpful article if you want to learn more about what happens to credit card debt when someone dies.
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